Would Alberta Be Better Off as a U.S. State?

In Alberta, there is a familiar argument: the province gets a raw deal from Confederation.

That argument usually rests on two assumptions.

First, that fiscal imbalance is somehow uniquely Canadian. Second, that the United States is more balanced, more equitable, and would treat Alberta more fairly if Alberta became a U.S. state.

Both assumptions are wrong.

In every federation, the strongest support the weakest. That is how federations work. Wealthier regions pay more. Poorer regions receive more. The goal is to balance services and opportunities across the country. 

Canada is no exception.

In Canada, Alberta, British Columbia, and Ontario pay more into the federation than they receive back. Alberta receives the lowest return, at about 61 cents for every dollar paid in. Prince Edward Island receives the highest return, at about 212 cents for every dollar paid in.

That sounds dramatic until you compare it to the United States.

In the U.S., 31 states pay more into the federal government than they receive back. Delaware receives only 46 cents on the dollar. New Jersey, Washington, and Massachusetts also receive poorer percentage returns than Alberta.

At the other end, New Mexico receives 342 cents on the dollar. West Virginia, Mississippi, and Alaska also receive better returns than Prince Edward Island.

In dollar terms, the gap is even clearer. New Mexico and Alaska receive about $15,000 more per person from the federal government than they pay in federal taxes. Nebraska pays about $10,000 more per person than it receives.

To compare that with Canada, we need to convert the Canadian figures into U.S. dollars. Alberta’s net contribution works out to roughly $3,600 U.S. per person. Prince Edward Island’s net benefit works out to roughly $6,480 U.S. per person.

That means Alberta contributes about $6,400 less per person to Canada than Nebraska does to the United States. Prince Edward Island receives about $8,500 less per person than New Mexico or Alaska.

Numbers don’t lie. Canada’s federation is far more balanced than America’s. 

And this isn't an anomoly.

Yes, there is more imbalance in the United States federation than there is in the Canadian federation. However, the United States isn't the only federation with more imbalance than Canada. The same is true of Australia, Great Britain and Germany, just to name a few. When you start comparing Canada's federation to others, you quickly find that Canada has one of the more balanced federations you can find. The disparities in Canada are much smaller than is normal in many other countries that are organized as federations.

So what happens if Alberta becomes a U.S. state?

Some Albertans imagine Alberta would suddenly become New Mexico or Alaska — a state receiving far more from Washington than it sends in.

That is fantasy.

Or maybe some Albertans just imagine that they would suddenly find themselves in a balanced state within the federation, contributing approximately what they receive.

To answer that question, we'd have to figure out where Alberta would likely slot into the American federation.

The United States has already established its spending priorities—its military, its infrastructure, its federal programs, and its military-industrial complex. These funds have already been allocated to regions in an established pattern for decades. Somehow I doubt that the regions benefiting from that spending would voluntarily step aside and say, "Sure, give Alberta some of that money.”

Alberta would get two senators and perhaps six or seven members of Congress. That is nowhere near enough political power to reorder American federal spending in any meaningful way.

 

Ten U.S. states already contribute more dollars per person to the American federation than Alberta contributes to Canada. And almost all of them will have more representation in the House of Representatives that Alberta would.

There is no good reason to assume that Alberta would be able to leapfrog them, and somehow get to the front of the line for federal benefits in the United States.

Whatever you may think, Alberta has far more clout within the Canadian Federation than it could ever dream of having within the American Federation.

It has a veto over changes to large parts of the constitution,  and a stronger voice in the remainder of the constitution than it would ever have with the U.S. constitution. In fact, it even has a clause that allows it to override certain aspects of the Canadian constitution, something that would be even more of a fantasy in the United States.

Alberta also has just a bit less than 10% of the seats in the House of Commons. In the United States, it would have about 1.5% of the seats in the House of Representatives.

In the United States, Alberta would be a tiny fish in a very big political pond.

And, if all that isn't enough. There is a legal mechanism by which Alberta can leave the Canadian federation. No such mechanism exists in the United States.

As a Canadian province, Alberta can complain about Confederation. It can threaten separation and it can use that threat politically.

As a U.S. state, that leverage disappears.

The precedent is already settled. Once you are in, you are in. A State of Alberta would not be able to threaten Washington with departure and expect to be taken seriously, nor would its departure be allowed.

Once Alberta is part of the United States, Alberta is part of the United States.

End of Story.

So, would Alberta be better off as a U.S. state?

The numbers say no.

Canada’s federation is not perfect. Alberta does pay more than it receives. Albertans are not wrong to notice that.

But the idea that the American federation would offer Alberta a better deal is, put extremely generously, unimaginably weak. The United States has larger imbalances, higher federal taxes(1), harsher fiscal gaps, and no reason to restructure itself for Alberta’s benefit.

If Alberta wants to argue about its place in Canada, that is Alberta’s right.

But if the question is whether Alberta would be better off as a U.S. state, the answer is clear.

It would not!

Notes:

(1) The U.S. Federal Government collected $15,352/person in tax and other revenue in 2025.

Canada's Federal Government? $8,747(USD)

Canadians do pay more taxes than Americans, but that's not at the Federal level. Provincial and Local taxes in Canada are far higher than State/Local taxes in the United States. That is where the entire gap is.